Aureus Mining Inc. AUE.to C$.08
Posted: Saturday Oct 15 10:18:06AM 2016
Well to be fair it was 1.5 GB pence/share, but I see it as hugely dilutive. I got out too (huge loss).
Posted: Friday Oct 14 7:24:37AM 2016
gave up today. Sold for .03. Big loss from .075 cost. New owners are selling stock to themselves at .015 to raise C$72 million to buy out the equipment and switch to owner operator mode. Should dramatically lower costs but can't wait for turnaround.
Posted: Monday Aug 8 5:36:49PM 2016
agree wasn't too positive but early days of restart. New owner is probably investigating every avenue. Need something close to capacity output to judge whether costs are permanently out of whack. Spreading costs over 25,000 ozs would definitely change the numbers. Let's see how long it takes them to get close. Not sure what comment about lack of machinery meant. Existing equipment was enough to produce over 20K oz two qtrs in a row.
Posted: Monday Aug 8 7:40:57AM 2016
Q2 numbers and operational update are out. Looks like costs are way above the engineering projections, they can't make profits until they bring their costs down by quite a bit. Also warning that they are still under capitilized and the new majority shareholder may need to inject more cash. Makes me wonder if that is a dilution play? Looks like my momentum trade turned into an investment.
Posted: Saturday Jul 9 6:40:13PM 2016
Added more AUE.to last week at .075 just before runup to C$.095. Settled at .09 Friday. Don't expect a breakout until they announce mine restart and full production of around 25K oz/qtr. Should happen in Q4. Waiting for reagent supplies to treat cyanide. Could take weeks and then slow ramp up of restart. Market cap still very low for a 110K/yr producer but they haven't restarted yet or proven they can pay their debts from the mine construction.
Posted: Wednesday Jul 6 9:06:07AM 2016
Looking back at some historical news releases, this was a pretty ugly story. The old management looked swamped.
I looked at their latest 43-101 and the project has an expected post-tax NPV(5%) of USD$274 million at a $1200 gold price, USD$378 at $1400 gold price. So if you believe that, there is at least a double left in value from today's price.
Holding my breath, I'm in for a momentum trade.
Posted: Monday Jul 4 9:23:43AM 2016
Aureus operates the New Liberty Gold mine in Liberia. Recently finished construction and declared commercial production in March 2016. Scheduled to produce around 110K oz of gold in 2016 and for the first 6 years of production. Unfortunately in May 2016, they were forced to close the mine due to an overflow from the tailings dam. Heavy rain caused the overflow but the bigger problem was the cyanide concentration was above specs. Low on cash and unable to make debt payments that were scheduled to begin with commercial production, Aureus had to seek financing again.
Stock price fell from a high of C$.55 in 8/15 to C$.06 in June 2016.
Aureus was able to get MNG Gold to inject $30million into the company to pay immediate payables and get the plant running again. MNG is a Turkish company with several operating mines. Owner is a billionaire. MNG got 600million+ shares for their injection and now control 53% of AUE.to. They have brought in mgmt and taken over the board. Consultants have been brought in to fix cyanide problem. Aureus also took advantage of the down time to reline the ball mill and make various improvements to the mill. Ore has continued to be stockpiled during the stoppage.
Here is the latest PR on the restart:
The hangup appears to be supplies of the reagent. Expect the restart announcement in the next few weeks after receipt of the reagent. Startup will be slow to test specs and make sure cyanide problem is solved. Unlikely 2016 total gold production will be anywhere near 110K but if restart goes well, Q4 should be back to Q1 2016 level of 22K ozs. The stockpiled ore should ensure adequate supplies for the mill, even during the upcoming rainy season.
After the dust settles from the financing, share count will have doubled to 1.2 billion shares. At C$.08, that's a market cap of C$96million. That's low for an operating 100K/yr producer.
I initially bought a few weeks ago at .065 and have been adding in the .07-.075 range. I think the restart announcement will send the stock up sharply but there are LOTS of bagholders who bought at much higher prices and are probably selling to get into other gold/silver stocks that are moving now.